Northern Territory v Mengel

129 ALR 1
1995 - 0419A - HCA

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(Decision by: Brennan J)

Between: Northern Territory
And: Mengel

Court:

Judges: Mason CJ

Brennan JDeane J
Dawson J
Toohey J
Gaudron J
McHugh J

Subject References:
Tort

Hearing date: 11 August 1994, 12 August 1994; 6 September 1994
Judgment date: 19 April 1995

Canberra

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Decision by:
Brennan J

The facts found by Asche CJ at the trial of this action show that the restrictions on movement of the plaintiffs' (respondents') stock which were observed in obedience to the directions given by Messrs Baker and Tabrett ("the Inspectors") caused the plaintiffs financial loss and that the Inspectors knew that the giving of those directions would cause such a loss.  Neither Inspector had statutory power or authority to give the directions which he gave. ^[F83]   On the other hand, neither Inspector was actuated by a desire to inflict injury on the plaintiffs.  Nor was either Inspector found to have given directions otherwise than in good faith, believing that he was empowered to give the directions and that it was his official duty in the circumstances to do so.

On these findings, was the plaintiffs' loss compensable as damages for a tort?  It is not sufficient for a plaintiff to show merely that he has suffered a loss that was caused by the defendant's conduct.  The conduct must infringe an interest which the common law protects and the conduct must be of a character which the common law treats as wrongful.  However, these twin requirements do little to define tortious liability.  Interests which are protected by the law of torts against some kinds of conduct are not protected against others (for example, privacy is protected against trespass but not against overseeing from an adjacent vantage point). ^[F84]   The loss suffered by a plaintiff must consist of an affection of an interest for which the law governing a particular tort provides compensation (for example, loss of reputation caused by defamatory statements, physical damage caused by negligence).  And the sense in which conduct is characterized as wrongful is merely that damages (not being damages for breach of contract) will be awarded for an infringement of particular kinds of interest caused by the particular kind of conduct.  However, Dr Lushington said in delivering the opinion of the Privy Council in Rogers v. Rajendro Dutt: ^[F85]

"it is essential to an action in tort that the act complained of should, under the circumstances, be legally wrongful as regards the party complaining; that is, it must prejudicially affect him in some legal right; merely that it will, however directly, do him harm in his interests, is not enough."

That necessarily leaves the elements of legal right or interest and wrongful conduct to be defined by the laws governing the several torts.  In this case, the relevant loss is pure economic loss.  There are several categories of conduct which are wrongful when they cause economic loss.  The critical question in the present case is whether the Inspectors' conduct to which the plaintiffs' economic loss can be causally attributed falls within any of the categories which the law of torts treats as wrongful in the relevant sense.

The various causes of action on which the plaintiffs sought to rely are examined in the reasons for judgment of the majority of the Court.  I am in general agreement with their Honours that the facts do not bring the case within any of the principles which define tortious liability.  In particular, the case does not fall within the criteria of liability stated in Beaudesert Shire Council v. Smith ^[F86] as interpreted in Kitano v. The Commonwealth. ^[F87]   I agree also that Beaudesert should be overruled, though it is supportable by old authority as Deane J. has demonstrated.  But there is one aspect of this case on which I would state my own reasons for coming to the same conclusion as that at which their Honours have arrived.

The tort of misfeasance in public office is well established. ^[F88]   Less clearly established are the principles which define the liability imposed on a public officer who, by use of his position or power: ^[F90]

"Now I take it to be perfectly clear, that if a public officer abuses his office, either by an act of omission or commission, and the consequence of that, is an injury to an individual, an action may be maintained against such public officer.  The instances of this are so numerous, that it would be a waste of time to refer to them.

Then, what constitutes a public officer?  In my opinion, every one who is appointed to discharge a public duty, and receives a compensation in whatever shape, whether from the crown or otherwise, is constituted a public officer.

...

It seems to me that all these cases establish the principle, that if a man takes a reward, - whatever be the nature of that reward, whether it be in money from the crown, whether it be in land from the crown, whether it be in lands or money from any individual, - for the discharge of a public duty, that instant he becomes a public officer; and if by any act of negligence or any act of abuse in his office, any individual sustains an injury, that individual is entitled to redress in a civil action."

The tort is not limited to an abuse of office by exercise of a statutory power.  Henly v. The Mayor of Lyme was not a case arising from an impugned exercise of a statutory power.  It arose from an alleged failure to maintain a sea wall or bank, the maintenance of which was a condition of the grant to the corporation of Lyme of the sea wall or bank and the appurtenant right to tolls.  Any act or omission done or made by a public official in purported performance of the functions of the office can found an action for misfeasance in public office.  Public officers perform a great variety of functions some of which have a judicial element in them.  We can put aside the cases which have a judicial element, ^[F91] as the directions which the Inspectors gave in this case were wholly administrative.

A number of elements must combine to make a purported exercise of administrative power wrongful.  The first is that the purported exercise of power must be invalid, either because there is no power to be exercised or because a purported exercise of the power has miscarried by reason of some matter which warrants judicial review and a setting aside of the administrative action.  There can be no tortious liability for an act or omission which is done or made in valid exercise of a power.  A valid exercise of power by a public officer may inflict on another an unintended but foreseeable loss - or even an intended loss - but, if the exercise of the power is valid, the other's loss is authorized by the law creating the power.  In that case, the conduct of the public officer does not infringe an interest which the common law protects.  However, a purported exercise of power is not necessarily wrongful because it is ultra vires.  The history of the tort shows that a public officer whose action has caused loss and who has acted without power is not liable for the loss merely by reason of an error in appreciating the power available.  Something further is required to render wrongful an act done in purported exercise of power when the act is ultra vires.

The further requirement relates to the state of mind of the public officer when the relevant act is done or the omission is made.  An early case is Ashby v. White, ^[F92] in which Ashby complained that the constables of the borough in which an election was held had refused to permit him to vote "fraudulently and maliciously intending to damnify him". ^[F93]   Lord Holt CJ, whose judgment ultimately prevailed in the House of Lords, held that malice was essential to the action. ^[F94]   Malice has been understood to mean an intention to injure. ^[F95]   In this context, the "injury" intended must be something which the plaintiff would not or might not have suffered if the power available to the public officer had been validly exercised.  (It is in that sense that I use the term "injury" hereafter.)  In more recent times, the scope of the tort has not been limited to cases in which a public officer has acted maliciously. ^[F96]   It has now been accepted that if a public officer engages in conduct in purported exercise of a power but with actual knowledge that there is no power to engage in that conduct, the conduct may amount to an abuse of office. ^[F97]   Thus Mann J. said in Bourgoin SA v Minister of Agriculture: ^[F98]

"I do not read any of the decisions to which I have been referred as precluding the commission of the tort of misfeasance in public office where the officer actually knew that he had no power to do that which he did, and that his act would injure the plaintiff as subsequently it does.  I read the judgment in Dunlop v. Woollahra Municipal Council in the sense that malice and knowledge are alternatives."

I respectfully agree that the mental element is satisfied either by malice (in the sense stated) or by knowledge.  That is to say, the mental element is satisfied when the public officer engages in the impugned conduct with the intention of inflicting injury or with knowledge that there is no power to engage in that conduct and that that conduct is calculated to produce injury.  These are states of mind which are inconsistent with an honest attempt by a public officer to perform the functions of the office.  Another state of mind which is inconsistent with an honest attempt to perform the functions of a public office is reckless indifference as to the availability of power to support the impugned conduct and as to the injury which the impugned conduct is calculated to produce.  The state of mind relates to the character of the conduct in which the public officer is engaged - whether it is within power and whether it is calculated (that is, naturally adapted in the circumstances) to produce injury.  In my opinion, there is no additional element which requires the identification of the plaintiff as a member of a class to whom the public officer owes a particular duty, ^[F99] though the position of the plaintiff may be relevant to the validity of the public officer's conduct.  For example, the officer's administrative act may be invalid because he or she did not treat the plaintiff with procedural fairness.  It is the absence of an honest attempt to perform the functions of the office that constitutes the abuse of the office.  Misfeasance in public office consists of a purported exercise of some power or authority by a public officer otherwise than in an honest attempt to perform the functions of his or her office whereby loss is caused to a plaintiff.  Malice, knowledge and reckless indifference are states of mind that stamp on a purported but invalid exercise of power the character of abuse of or misfeasance in public office.  If the impugned conduct then causes injury, the cause of action is complete.

The plaintiffs submit that the requisite elements of the cause of action are satisfied by "constructive knowledge" of the absence of power to engage in particular conduct and foreseeability of the injury suffered by the plaintiff.  This submission carries concepts familiar in the law of negligence into the tort of misfeasance in public office to which, in my opinion, those concepts are foreign.  A public officer is appointed to his or her office in order to perform functions in the public interest.  If liability were imposed upon public officers who, though honestly assuming the availability of powers to perform their functions, were found to fall short of curial standards of reasonable care in ascertaining the existence of those powers, there would be a chilling effect on the performance of their functions by public officers.  The avoidance of damage to persons who might be affected by the exercise of the authority or powers of the office rather than the advancing of the public interest would be the focus of concern.  Foreseeability of damage to another by one's own conduct is the factor which warrants the imposition of a duty of care to the other when engaging in the conduct.  But the tort of misfeasance in public office is not concerned with the imposition of duties of care.  It is concerned with conduct which is properly to be characterized as an abuse of office and with the results of that conduct.  Causation of damage is relevant; foreseeability of damage is not.

Different considerations apply when a tort other than misfeasance in public office is relied on as a source of liability.  Public officers, like all other subjects, are liable for conduct that amounts to a tort unless their conduct is authorized, justified or excused by statute.  A statute is not construed as authorizing, justifying or excusing tortious conduct unless it so provides expressly or by necessary intendment.  In particular, a statute which confers a power is not construed as authorizing negligence in the exercise of the power.  Thus liability may be imposed on a public officer under the ordinary principles of negligence where, by reason of negligence in the officer's attempted exercise of a power, statutory immunity that would otherwise protect the officer is lost. ^[F100]   But there is an obvious difference between the malice, knowledge or reckless indifference as to the existence of a power that is an element in the tort of misfeasance in public office and negligence in the exercise of a power which precludes a plea of statutory authority to engage in the conduct complained of.

A distinction must therefore be drawn between an absence of reasonable care in ascertaining whether a power is available for exercise and an absence of reasonable care in exercising an available power.  Error by a public officer in the ascertainment of available power may found a misfeasance action, if at all, only if the public officer knew that there was no power ^[F101] or was recklessly indifferent as to the existence of the power to engage in the conduct which caused the plaintiff's loss.  In O'Connor v. Isaacs ^[F102] Diplock J. said:

"If A, acting in perfectly good faith, orders B to do something, which order both A and B erroneously think A is entitled to give, and B does it, I know of no principle which makes A liable for any damage suffered by B as a result of doing it.  It seems to me that it is damnum absque injuria.  If a policeman, who has a limited authority, orders me to cross the road in circumstances where he has no right to do so, and I do so, and as a result of that I suffer damage, both of us erroneously thinking that he is entitled to give such an order to me, I cannot see any principle on which I should be entitled to recover from the policeman the damage which I have suffered as a result of our mutual mistake of law.  Now, if A does it maliciously, then it may well be that an action will lie, whether or not he has got the authority to give the order, although in Gelen v. Hall ^[F103] the court left open the question whether an action would lie."

That case related to a judicial order made by justices, not to a purported exercise of a purely administrative power.  Nonetheless, the reference by Diplock J. to the policeman's order shows that his Lordship's dictum was intended to apply to a purported exercise of administrative as well as judicial power.

Where a public officer takes action that causes loss to a plaintiff - in the present case, by giving directions - and the sole irregularity consists of an error as to the extent of the power available to support the action, liability depends upon the officer's having one of the states of mind that is an element in the tort of misfeasance in public office.  That element defines the legal balance between the officer's duty to ascertain the functions of the office which it is his or her duty to perform and the freedom of the individual from unauthorized interference with interests which the law protects.  The balance that is struck is not to be undermined by applying a different standard of liability - namely, liability in negligence - where a plaintiff's loss is purely economic and the loss is attributable solely to a public officer's failure to appreciate the absence of power required to authorize the act or omission which caused the loss. ^[F104]   The law does not speak with a forked tongue when dealing with the limit of liability of a public officer.  It is unnecessary now to consider whether additional factors (for example, express representation of authority or known reliance on authority) may attract liability to a public officer under the law governing the tort of negligence.  But the only question in this case is whether the elements of the tort of misfeasance in public office have been established.

The findings in the present case go no further than establishing that the directions were given without power.  Perhaps they do not go that far.  In any event, there was no finding that the Inspectors were acting otherwise than in good faith; nor was there a finding either that they knew they had no power to give the relevant directions or that they were recklessly indifferent to the availability of that power.  In the absence of such findings, the Inspectors' giving of directions to the plaintiffs cannot be held to have been wrongful.  Misfeasance in public office was not established.  At base, the plaintiffs' claim against the appellants rests on the assertion that the Inspectors had no power to give the directions which they gave.  In the absence of a finding that the Inspectors knew they had no such power or were recklessly indifferent to their having such power, the plaintiffs had no case.  The appellants were not liable as for any other tort where the damage consisted of pure economic loss.  There was no basis on which negligence could have been sheeted home to the appellants.  Had there been any act of trespass to the plaintiffs' cattle, the Inspectors may well have been liable accordingly, but not for the tort of misfeasance in public office.

The appeal must be allowed, the order of the Full Court set aside and in lieu thereof the appeal to the Full Court allowed, the judgment of Asche CJ set aside and in lieu thereof the plaintiffs' claim be dismissed.